A prenuptial agreement, sometimes referred to as a “prenup,” is a legal agreement signed by a couple prior to their marriage. The agreement specifies who owns which assets, the rights and obligations of each spouse, and how their assets would be divided if the couple would later separate or divorce. Drafting a prenuptial agreement is not the most exciting or romantic part of wedding planning – but this legal document can become critically important down the line. There are several situations in particular where a couple should consider drafting a prenup.
You Are A Business Owner
If you are a business owner, your company is one of your largest assets – and one that took countless years and dollars to develop. If you and your spouse divorce, your ex could claim a share of the business. This could lead to fights over ownership, impact your company’s productivity and cash flow, and cause you to incur significant litigation expenses, not just for attorneys but for other experts such as business valuators. A prenuptial agreement could classify the business and its assets as separate property, meaning not subject to division in a divorce. This can also protect the income-earning spouse, as it makes the amount of alimony predictable rather than leaving it up to the court at the time of divorce.
You Or Your Spouse Plan To Stop Working
In marriage, it is relatively common for one person to leave their career to take care of their home and family. If the marriage comes to an end, this can put the non-working spouse in a difficult financial position. With a prenuptial agreement, the couple can specify what amount, if any, the income-earning spouse would pay to the non-income-earning spouse in case of divorce.
You Or Your Spouse Have Blended Families
A person who is re-marrying has different legal and financial concerns than during their first marriage. They may also have continuing obligations to their previous spouse or children from a prior relationship. If a person is concerned about their estate, or distributing certain assets or property to their children, a Last Will and Testament is likely the best legal tool to make sure a person’s wishes are followed. However, a prenuptial agreement can also help. A prenup can protect certain property by making it separate (non-marital) property. It also can protect the new spouse’s assets from being used to pay the debts from a prior marriage.
Your Finance Philosophy Differs From Your Spouse’s
If one person in your relationship is a saver and the other is a spender, it is better to discuss those issues prior to the marriage, rather than running into financial conflicts later on. In addition to helping a couple create a more financially transparent marriage, a prenuptial agreement can protect you from being responsible for your partner’s debts in case of divorce. Additionally, if you or your partner has inherited or is expecting to inherit assets, a prenuptial agreement can help keep those assets as separate (non-marital) property, not subject to division in a divorce, and make sure any family heirlooms stay in your possession.
In conclusion, a prenuptial agreement is important for couples about to walk down the aisle, because these legal documents can help protect both spouses and ensure their financial stability. If a prenup is in place when a couple decides to divorce, it can help alleviate stress and frustration and help the parties to move on and start anew. If you or someone you know is interested in a prenuptial agreement, you can contact Porchlight at (678) 435-9069 or Max@ruthmarlaw.com.